Thousands of acres of publicly-owned brownfield land are to be released by the Government for housebuilding, David Cameron has announced on the eve of the Conservative Party conference.
Up to 100,000 homes are expected to be built under the scheme, which is designed to support growth and improve affordability in the housing market.
Cash-strapped developers will be given the opportunity to pay for the land later, when properties are sold, thereby by-passing the lack of upfront finance.
Aides said the plan, which comes amid criticism of the Government's attempts to boost economic growth, would support 200,000 jobs.
Getting the economy back on its feet will be a major theme for Cabinet ministers at the Tory conference in Manchester this week as the recovery continues to flag.
"The Government owns huge amounts of land, mostly brownfield sites, previously developed, either out of use or being run down in some way," Mr Cameron told The Sunday Times.
"There's an enormous opportunity to build homes on those sites."
He said it was "appalling" that the average age of first-time buyers without financial support from their parents was now 37.
The Tories say that housebuilding fell to its lowest peacetime rate since 1924 under the last Labour government.
"This is a market that isn't working. Lenders won't lend, so buyers can't buy, and builders can't build," Mr Cameron said.
"I believe we've got to get in there and help sort it out. I want people to have the chance to own their own home. This is a creative way of getting those homes built. I think it can make a big difference," he said.
Whitehall departments have been instructed to publish plans of previously-developed land and empty offices that they can release for house-building.
Ahead of the Tory conference in Manchester, which starts today, senior Tory MP Andrew Tyrie criticised the Government's response on the economy, saying it lacked a "coherent and credible" plan for growth.
He criticised initiatives like the Big Society and localism for being "at best irrelevant" to the need for growth - "if not downright contradictory to it".
His concerns about the lack of an economic growth plan echo Labour leader Ed Miliband's attack on the Conservative-Liberal Democrat coalition during Labour's conference this week.
But Mr Cameron promised yesterday to set out in the days ahead "the most ambitious growth plan that we could possibly have".
It was announced yesterday that workers with less than two years' service would be prevented from taking their employers to a tribunal for unfair dismissal - a move intended to make firms more confident about taking on staff.
As delegates gathered in Manchester there was speculation that Mr Cameron could offer Cabinet jobs to Nick Clegg and other senior Liberal Democrats in 2015 even if the Tories won an outright majority.
The Independent On Sunday said it had been leaked a secret plan under which top Lib Dems could be cherry picked by Mr Cameron if he only had a tiny majority.
In an interview with the paper, Cabinet Office minister Francis Maude repeatedly declined the opportunity to rule out such a scenario.
"I think it's time to think about that when we see what the landscape looks like," he said.
The idea will anger Conservatives suspicious of the Prime Minister's closeness to the Lib Dems.
Former Tory Cabinet minister Lord Tebbit challenged Mr Cameron to set out his Tory credentials at this week's party conference.
"The Prime Minister's speech this week should set out the programme for a majority Conservative government," he wrote in The Independent on Sunday.
"We, Tory activists and the electorate alike, want to know what sort of Conservative Mr Cameron really wants to be."
Foreign Secretary William Hague also risked annoying Tory cynics about the coalition by favouring the present Government to the last Tory administration in the 1990s.
"When you sit with David Cameron and Nick Clegg and other senior colleagues examining an issue, it is a wonderfully refreshing, rational discussion, actually, in which you know your party identity is not the first consideration," he told The Observer.
"The Government has a more united spirit than the last government I served in at the end of 18 years of Conservative government."
But Home Secretary Theresa May risked angering Lib Dem Cabinet colleagues by throwing her weight behind calls for the Human Rights Act to be scrapped.
In comments that will endear her to many Tories, she said she would "personally" like to see it go because of the problems it has presented the Home Office.
But senior Lib Dems, including Deputy Prime Minister Nick Clegg and Energy Secretary Chris Huhne, have pledged that the act will stay.